Members of the Delaware House collectively filed 13 bills for consideration to help tackle the fallout from countywide reassessments, which have resulted in skyrocketing tax bills for some residents.
In 2021, all three counties agreed to conduct a court-mandated reassessment of their residential and commercial properties as part of settling the highly publicized lawsuit re Delaware Public Schools Litigation, 2020.
Delawareans for Educational Opportunity and the Delaware NAACP sued the state, arguing it had been aware of deficiencies in educational resources for low-income students, English language learners and students with disabilities and had not adequately addressed those disparities. Part of the organizations' arguments were that the First State was utilizing an outdated mode for valuing property, leading to funding inequalities within Delaware schools.
The last time each of the counties conducted a reassessment staggers between the early 1970s and late 1980s.
All three counties pledged to conduct this latest reassessment with revenue neutrality in mind, meaning tax rates are supposed to be adjusted in tandem with the new property values to ensure counties are bringing in close to the same revenue as they were prior.
Although this provision was not utilized this time around, under state law, counties are entitled to increase their tax rates to bump up overall tax revenues by up to 15% following a reassessment.
Despite counties committing to a revenue-neutral process, several homeowners still saw jumps in their tax bills due to their properties being reassessed for the first time in decades.
Residents are also seeing tax jumps following school boards' decisions across the state to raise property taxes.
Generally, districts must go to referendum to increase taxes, but these recent hikes are due to a provision in Delaware law that allows school districts to realize a total revenue gain of up to 10% following reassessment.
Several residents are reporting hundreds and sometimes thousands of dollars in additional property taxes following the reassessment process, which prompted state lawmakers to step up to the plate and schedule a special session on August 12 in an effort to pass legislation to provide relief for Delawareans.
Why schools are adopting tax hikes without referendum
Delaware's public education funding system has been a challenging topic for decades. Its antiquated unit count system, established in the 1940s, had largely remained untouched until the 2020 lawsuit.
While some strides toward funding equity have been made, like the creation of Opportunity Funding in 2021, — an additional source of education monies to support the increased needs of low income and English learner students — conversations around referendum reform remain ongoing.
Delaware schools have notoriously found it difficult to raise revenue to compensate for expenses over the years, as pointed out by Chancellor J. Travis Laster in his opinion on the education funding inequity lawsuit, “Prevailing in a referendum is difficult, and referendums often fail. Some residents object as a matter of principle to having their taxes increased. Others object to the frequency of the requests. It takes time and effort to understand Delaware’s complex system for funding public schools, including the direct link between the counties’ persistence in using decades-old property assessments and the need for recurring referendums.”
The ability for schools to raise revenue after reassessment by up to 10% without voter approval was codified with bipartisan support in 1972, but for decades schools have not been able to utilize this provision due to the lack of routine reassessments.
The Delaware State Education Association (DSEA) — the union representing over 12,000 educators statewide — wrote a letter to the General Assembly on August 8 arguing the 10% provision is a way for school district's to access the financial support they need without relying entirely on the referendum system.
Up until 2023, Delaware Code never outlined how often reassessments needed to occur. Following the signing of House Bill 62, it is now required by law that counties reassess every five years.
School boards across the state are implementing tax increases following the reassessment, anywhere from 1% to the full 10% allowed. Some cited concerns around federal funding cuts when voting to approve the increases while others attributed serious budget concerns or needing to cover salary and general expenditure increases.
The Public Education Funding Commission, set to reconvene on Monday, has been tackling a variety of concerns surrounding education funding and will ultimately make official recommendations on how Delaware should alter its education funding structure.
What lawmakers are proposing during the special session
There were 13 pieces of legislation included in the House pre-file list sent out Thursday night, all addressing the recent reassessment process in some form.
While 13 bills have been filed, not all could be considered on Tuesday. A motion will have to be made to suspend the rules for each bill to be brought to the floor for discussion and a vote.
Speaker of the House Melissa Minor-Brown (D-New Castle) says the chamber plans to run three priority bills: House Bill 240, House Bill 241 and House Bill 242.
House Bill 242 has been the centerpiece of solution discussions, receiving public support from both sides of the aisle.
Championed by State Rep. Kim Williams (D-Stanton), the bill would give any school district located in New Castle County the ability to reset its tax rates for the 2025-2026 tax year and reissue a tax warrant using different tax rates for residential and non-residential property.
The ability to tax commercial/non-residential properties at a different rate than residential is something recently implemented by New Castle County, but school districts were not afforded the same ability.
“HB 242 will allow school districts to reset and set new tax rates for residential and non-residential ‘commercial’ properties. This will provide districts with an immediate capability to adjust their residential tax rates to offset some of the tax burden to non-residential properties for this year’s taxes, while we work on a longer term resolution," Rep. Williams said in a statement.
House Bill 240, also sponsored by Rep. Williams, would allow residents who successfully appeal their property values to be eligible for direct cash refunds if they have overpaid on their tax bills by $50 or more.
If the overpayment is less than $50, a county may elect to refund or credit the amount against future taxes due.
Finally, House Bill 241, sponsored by State Rep. Nnamdi Chukwuocha (D-Wilmington), would require that during the first tax year following a general reassessment, a payment plan be made available to residential taxpayers whose tax bill increases by $300 or more over the prior year.
“Just to be transparent as a leadership team, those are the bills that we've discussed with our caucus, and so it's only right for us to move forward with the ones that we've been transparent about," Speaker Minor-Brown said.
Rep. Williams introduced two other bills that would lower the income threshold to be eligible for school tax exemption in New Castle County and make permanent
the different tax rates for residential and non-residential property, but she says these bills likely will not be taken up until January.
State Rep. Madinah Wilson-Anton (D-Newark) also introduced a slate of bills, although they are not listed on Tuesday's agenda.
House Bill 247 would create a payment plan process, similar to legislation proposed by Rep. Chukwuocha, and House Bill 248 would allow all three counties to accept tax payments on a quarterly or monthly basis.
Rep. Wilson-Anton also brought forth House Bill 249, which would void all county-issued tax bills for the 2025-2026 tax year and would require those bills be reissued using the previously assessed value of the real property.
"It's been 40 years since the last reassessment, so errors are expected, but Delaware's homeowners and public schools shouldn't have to suffer because of this," Wilmington City Council Member Christian Willauer said at a press event announcing Rep. Wilson-Anton's bills. "I'm calling for an audit and a one-year delay in the implementation of Tyler Technologies' new assessment numbers. No one should have to pay taxes on a value that is more than their home is worth. The results of this assessment showed that some of the biggest corporations in the state are getting a reduction in their tax bill, while homeowners are paying the difference."
Tyler Technologies was hired by all three counties to conduct the reassessment, and legislative leadership is currently looking into how equitably the process was conducted following the aftermath.
As for the voiding of already issued tax bills, Speaker Minor-Brown raises concerns over the legality of using now-outdated property assessments moving forward and says a House attorney is looking into House Bill 249.
Two resolutions from Rep. Wilson-Anton would direct the Public Education Funding Commission to make recommendations by Jan. 1, 2026 around achieving equitable collection and distribution of property tax revenue and another would direct various state agencies to make recommendations on how the state can better support future property tax reassessments.
Democratic lawmakers from both chambers intend to introduce a similar resolution calling on officials from counties, municipal governments, school districts and other leaders to develop further legislation to address reassessment concerns moving forward.
There were two Republican-lead bills filed on Thursday.
House Bill 245 from State Rep. Mike Smith (R-Pike Creek) would require that school districts collect the same total revenue after reassessment with two caveats.
The first would allow districts to increase revenue after a reassessment but limited solely to situations where they would be facing a projected deficit and only to the extent needed to balance the budget — any potential increase would be capped at 10%. The second would make the bill retroactive to July 1, 2025, which would set back various budgets adopted by school districts across the state that voted to implement tax increases.
State Rep. Bryan Shupe (R-Milford) says he would only introduce his legislation, House Bill 246, if Rep. Smith's bill passes, noting his proposal is contingent on schools having to prove they need to counteract a budget deficit.
Shupe's bill would limit the 10% increase in school property tax revenue to 2% per year for 5 years after a general reassessment in an effort to make the hike more gradual for taxpayers.
These Republican initiatives are some backlash from state leaders, particularly from DSEA President Stephanie Ingram, who argues in her letter to the General Assembly that the changes would restrict school boards' legally entitled ability to raise revenue post-reassessment.
"Worse still, those proposals seek to retroactively deny school districts the funding they have already budgeted for the upcoming school year. Retroactively eliminating the 10% funding enhancement will cause immediate harm to Delaware students, resulting in immediate job cuts, devastating program cuts to sports and arts programs, and cuts to planned improvements to school technology programs and curricula updates," she wrote.
The letter goes on to encourage lawmakers to defer decisions around generating local education funding to the Public Education Funding Commission, instead of "making sweeping changes to how [Delaware] public schools are funded during a one-day special session."
Rep. Wilson-Anton notes its not just Republicans who are considering altering the ability for districts to raise revenues by 10%.
"I would like to put on the record that conversation around the 10% that schools are allowed to raise the year after a reassessment— I think there's a very dangerous narrative that's being peddled by colleagues on both sides of the aisle and members of the public who don't understand what that is for," she said. "Part of the reason is because after reassessment, you have appeals, and we really don't know how many appeals are going to be found in favor of the person appealing. So it is an insurance for our schools."
Speaker Minor-Brown also raised concerns over a lack of support from districts around the legislation, but Rep. Smith previously told Delaware Public Media that he's more worried about the crunch taxpayers are in.
"I don’t really care what the school districts think. I’m more worried about the residents, and that’s who I represent. I think what this goes to is a structural conversation on how we fund schools and what’s broken about it," he said. "If they need it, show us why you need it. Let’s dive into the data and show us. Let’s not just say you need it because if it’s for a budget shortfall, you already knew of that shortfall. You shouldn’t be raising it for anything else."
Speaker Minor-Brown says she feels the most confident in supporting the three bills set for Tuesday's agenda, and her main concern around the remaining bills filed are if the sponsors talked to the appropriate stakeholders.
"I don't think people understand we are literally playing with people's lives when we just come up with bills that look good, and we haven't really thoroughly planned out how it would impact us in the short term and in the long term," she said.
State Rep. Frank Burns (D-Newark) made similar remarks at Rep. Wilson-Anton's press conference as a co-sponsor on all of her pieces of legislation: "There have been some pieces of legislation that have been put forward by some individuals — none of the people standing up here today — who did not talk to the CFOs of the school boards, did not talk or engage with the school boards and what their needs were, and just threw out legislation to basically make headlines. I think this is damaging, and I think it hurts what we really need to achieve here in Delaware."
Rep. Burns did not name any lawmakers or pieces of legislation directly, but Rep. Wilson-Anton followed his remarks by stating her direct opposition to Rep. Smith and Rep. Shupe's bills.
The House and Senate are set to convene Tuesday at 2 p.m. to consider the proposed legislation. The Senate is expected to release its pre-filed legislation on Monday.
